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S/4 HANA Finance has simplified the FI-CO integration. Previously we have to create separate cost element master for primary cost element.

Previously we have 2 type of cost element and even now exist as well but S/4 HANA Finance has introduced many changes with respect to master data.

Previously when any one used to ask us about difference between primary cost element and secondary cost element. First thing in our mind was that primary cost element has GL master reference in FI while secondary cost element do not have GL master reference in FI.

Above differential statement is of past days now in context to S/4 HANA Finance.

If in future any one will ask the same question we have to clarify first that are you asking in context of ECC or S/4 HANA Finance.

So now question arise what new changes SAP has bought with S/4 HANA Finance.

Answer is here:

Primary cost element master were being created separately in ECC using KA01 transaction with respect to GL master in FI. Now these 2 different master has been merged and cost element category field has been added to control tab in GL master itself.

Secondary cost element were part of only CO there was no GL master in FI with respect to secondary cost element but now S/4 HANA Finance has introduced secondary cost element master in FI as GL master. We have to create secondary cost element as GL master in FI with S/4 HANA migration.

Now question arise if we have GL master for both type of cost element then how we differentiate that this GL belongs to secondary cost element type or primary cost element type or balance sheet account as previously we have only 2 radio button as P&L statement acct or Balance sheet Account.

We used to select P&L statement acct for primary cost element but now we have secondary cost element as well so how we handle this.

Answer is here that SAP has added a new field GL account type to GL master chart of account data. While we create GL master we have to select following GL account type: Non-operating expense or income, Primary cost or revenue, secondary cost or balance sheet.

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